VAS and Handset Development

Introduction

India is one of the world's fastest growing mobile markets, with a current subscriber base of 347 million (as of Dec 2008) , and slated to grow at more than 40% year on year. Out of these, 93% of the subscribers are prepaid subscribers. Rural subscribers are also increasing every year, representing 20% of the total GSM subscriber base in 2006 to 37% of subscriber base in 2008.

One of the key metrics in the telecom industry, the Average Revenue per User, has been on a constant decline, from Rs. 261 in 2007 to Rs.220 in 2008. As opposed to this, the average minutes of usage per subscriber per month have been constantly rising, from 464 minutes in 2007 to 496 in 2008; although the rate of growth has been declining. Despite the variations in all above the counts, the contribution of VAS to the total revenue share has been a constant 11-12% over the last 5 years.

dddThe major contribution to the VAS revenue still comes from SMS, at 37% . This is followed closely by Ringtones and CRBTs with a share of 24% of the total pie. GPRS and content downloads contribute to about 13% of the revenues, with the rest of the revenues being split between other VAS like IVRs,WAP portals etc.

Source: Future of VAS in India, December 2007, Stanford University and BDA

The mobile handset market in India has 5 major players, Nokia, Samsung, LG, Motorola and Sony Ericsson. These brand face competition from not only each other but also mobile phones available in the grey market at much lower costs. In 2008, value sales of mobile phones in India grew by 12% over prior year, reaching more than Rs 333 billion.

The increased demand for expensive smartphones is likely to drive average unit prices up. At the same time, increased use of mobile phones among rural users is likely to lead to volume sales growth for low-cost handsets. Taking these situations into account, it's expected that prices in the sector are likely to dip, but only slightly. Nokia is reportedly looking at configuring its phones for the push into rural markets, with services providing information on micro financing, agriculture and weather reports. Spice Telecom, on the other hand, is to grow by offering handsets in bundled offering with service packs. The company has developed a handset called Spice S300, priced at Rs 599, targeted at the rural user. Similarly, most of the handsets offered in India with regional language support are the low end handsets, priced below Rs. 3000.

This research aims to explore the usage of the regional language(RL) text functions and regional language VAS across SECs and age-groups. It is an exploratory research which aims to find out how

· Users who currently own regional language supported handsets use them for RL functions

o Currently, mobile phone handset manufacturers have introduced RL keypads only in the lower range of their offerings i.e. typically for handsets costing between Rs.500 to Rs. 3000. Hence it can be safely assumed that these handsets are targeted at SEC B and lower SECs. From these users, I aim to find out if and how they use the regional language functions on their phones, for what purpose and occasions.

· Users who currently use RL VAS (non-text) – their usage and susceptibility to use RL text functions

o In this part of the study, an attempt will be made to explore the communication habits of individuals in the higher SECs. By communication habits, we mean text based communication, mainly SMS, and other forms like e-mail, IM, social networking sites etc.

Currently there is no data or study available on the relationship existing between preferences for RL functions on the handset and RL VAS. This study aims to isolate these preferences for RL VAS and RL functions.

Literature Review

Review Inputs from Academic Journals

One of the few research papers written in this particular field about mobile phone usage and capabilities , sheds some light on the difference between usage among owners of basic phones and smart phones. Basic mobile phones are equipped with messaging options such as SMS and MMS, and nowadays often with a GPRS connection, which enables the user to browse WAP pages. The label ”smartphones” refers to any electronic hand-held devices in which the functionality of a mobile phone and a personal digital assistant (PDA) have been integrated into a single gear. The results of the study indicate that users equipped with smartphones are more active in using SMS mobile services than users with basic mobile handsets. The author also quotes “mobile phone users' handset types seem to be a strong indicator of their mobile service usage in the sense that smartphone users are more active in mobile data communication than users with basic mobile phones. (Karjaluoto, 2009). The study was conducted in Finland, and hence can't be directly applied to mobile markets in a developing and diverse country like India.

A study conducted in Korea to identify drivers for use of mobile phones identified social, economic and personal gratifications as key motivators (Chang Hyun Jin, 2008). According to the authors, a classification system for consumer uses reveals that people are motivated by a desire to fulfill or gratify specific needs. To form a personal identity, people are likely to use different media ( TV, Radio, Internet, Newspapers etc) . Thus, new advances in mobile service should take into account the consumer desire to gratify needs for his personal identity. It should be noted that this study was conducted on undergraduate studies in Korea, hence is not representative of the sample for this study entirely. Understanding how and why consumers use their mobile phones is important for charting new avenues in m-commerce. Research of mobile phone users' motivations will benefit practitioners eager to unravel the medium's potential as well as provide them a means to understand its underutilized potential.

Yang and Jolly conducted a study in 2006 to determine which aspects of consumer value have antecedent effect on using Mobile data services. The four dimensions of consumer perceived value were measured as antecedents of consumer attitude and behavioural intention to use mobile data services in this study. The dimensions were – Emotional, Functional, Social and Monetary values. Although the results of the study indicated that monetary value had no effect on consumer attitude toward using mobile data services, other dimensions of consumer values (functional value, emotional value, and social value) had significant effects on consumer attitude and consequently behavioral intention to use mobile data services.

The authors then concluded that in accordance with the study, marketers should enhance emotional value, which is the strongest effect on using mobile data services in the study. Emotional value can be derived when marketers provide entertainment aspects of mobile data service (i.e., gaming, downloading ringtones, and downloading graphics) and it can be enhanced when consumers perceive that mobile data services are easy to use and fun. Functional value is characterized by efficiency, timeliness, and reliability. Mobile marketers who plan to capitalize on the functional value of using mobile data services should consider functional value characteristics to increase consumer perception of the functional value of mobile data services. Further, practical

or technical benefits of mobile data services may add functional value for users of mobile data services. Social value did not have positive and strong effects on attitude toward using mobile data services. Social value in using mobile data services can be added when mobile marketers provide social networking opportunities via mobile data services (e.g., virtual community).

An interesting opportunity in the current situation in high-density population and low per capita income countries like India, China and Latin American Countries is highlighted by Salaberry and Upton (2007). In their paper, they outline the need for low-income population in these countries to learn English, and go on to suggest ways in which harnessed the high mobile penetration in these communities. The high penetration of English-keypad mobile phones, combined with advertisement supported assistance, can be used to provide Language assistance and educational services to such communities. mobile language instruction products, subsidized by context-relevant advertising, would prove an effective means to off set traditional costs associated with deploying wireless infrastructure, handsets and mobile content.

A technical paper on the interface in mobile phones (Zhou, 2007) highlights the possibilities of using a Natural Language Interface on a mobile phone as opposed to the current Graphical User Interface. An NLI is a user interface that allows people to interact using a human language, such as English or Chinese, as opposed to a computer language, command line interface, or graphical user interface (GUI) (Thompson and Ross 1987). If technically feasible, an NLI supported mobile phone can open up a whole new world for regional language mobile interfaces.

Definition of VAS

Numerous definitions for VAS are available from various sources. The following section will focus on understanding some of the definitions and arrive at a suitable definition for this study.

1. “Mobile value‐added services (VAS) are those services that are not part of the basic voice offer and are availed off separately by the end user. They are used as a tool for differentiation and allow the mobile operators to develop another stream of revenue” – (IAMAI & eTechnology Group @IMRB, 2008)

2. “Network operators provide a large pool of services and everything apart from basic voice is considered “value‐added.” Included is everything from receiving stock market information to downloading cricket highlights or video streaming Bollywood trailers or reading email on the go” (Bhashyam Cohen Dreyfus Kim, 2006) .

3. “Value‐added services (VAS) are unlike core services. They have unique characteristics and they relate to other services in a completely different way. They also provide benefits that core services can not” (http://www.mobilein.com/what_is_a_VAS.htm, 5th Feb 2010, 5.00 pm).

4. “Mobile value‐added services (VAS) are those services that offer differentiation and the ability for mobile operators to charge a premium price. Mobile VAS include non‐voice advanced messaging services such as SMS, MMS, MIM, and UM and wireless data services based on wireless data bearer technologies such as WLAN, GPRS, 1xRTT, WAP with VAS applications including mobile gaming. Mobile VAS also includes voice‐based services such as PTT and WDA” (http://www.mobilein.com/mobile_VAS.htm, 5th Feb 2010, 5.10 pm).

Classification of Value Added Services

Classification I

Stand alone value added services: These are those value‐added services that stand alone from an operational perspective. These types of services need not be coupled with other services, but they can be. Many non‐voice services fall into this category. They are often provided as an optional service along with voice services, but they could be offered and used by themselves without the voice service. For example, SMS could be offered and used as a service without voice calling. (http://www.mobilein.com/what_is_a_VAS.htm, 7th Feb 2010, 4.00 pm):

Non stand alone value added services: This category of value added services adds value to existing services. While it seems implicit in the definition of value‐added, this is an important principle that makes value‐added services stand apart from other services. For example, call diverts, conference call, caller identification services are services that cannot exists on their own but exist along as a part of the main service.

(http://www.mobilein.com/what_is_a_VAS.htm, 7th Feb 2010, 4.00 pm)

Classification II

P2P: Person to Person SMS, the most common form of mobile communication apart from voice

Ringtones: This is inclusive of monotunes, polytunes, and truetunes and also includes CRBT (Caller ring back tones).

P2A & A2P: P2A (Person to Application) SMS inclusive of messages sent by end users for contests & for seeking other information like news & updates; (A2P)Application to Person SMS inclusive of service push by enterprise service providers; Also include calls on IVRS for all other services like astrology.

Games & Data: Games include download of one play games offered by Reliance & full play games offered by other operators; Data include download of wallpapers & logos. Others: Include MMS (Multi Media Messages) & subscription charges for WAP services.

Classification III

Entertainment VAS‐ it is designed for mass appeal and extensive usage. Entertainment VAS is very popular and also stands at providing good revenue for the cellular industry. It generally consists of services like Jokes, Bollywood Ringtones & games.

Info VAS‐ it is loosely defined as a set of service which offers the information to the mobile user. It mostly consists of personal information often requested by the personal needs of a user. Services like movie tickets, news, and bank account form a part of it. It also offer services to users on other product categories like real estate, education etc.

MCommerce VAS (Transactional services) ‐ booking of train tickets, movie ticket or any such transaction would essentially consists of MCommerce VAS. They have not yet been launched in full fledge. They are in a very beginning stage. (Mobile value added services in India, IAMAI & eTechnology Group@IMRB,2008)

Value chain of VAS

The value chain in mobile VAS is as follows:

Content producers à Content Aggregators -à Mobile Service Providers

Content producers are primarily Bollywood, cricket, and singers etc. they typically share around 25 percent of the revenue. Content aggregators are VAS providers like MAUJ and IMI Mobile who share another 25 percent of the revenue and finally are the wireless service providers who supply it to the consumers like Vodafone, Airtel etc. they share the remaining 50 percent of the revenue.

The three important components of the telecommunication sector that form a part of this value chain are:

• Service providers

• Mobile handset makers

• Content providers or VAS suppliers

Service providers: For example if we consider Airtel and the second method of classification we see the following ‐

Mobile handset makers:

Handset makers have a huge role to play as they provide the platform on which these services are being used. All major players in the handset makers are designing products that can host more value added services. And these handsets are again being designed in such a manner that they suit the needs of various segments of the market and the kind of services used by these segments. For example for business related activities companies like Nokia and Motorola had come up new models like Nokia E‐61, MOTO Q9h etc. these phones have been designed in such manner that host the business related value added services like push mails, Wi‐Fi connectivity etc. On the other hand for younger generation that media and music crazy models like MOTOROKR E8, Sony Ericsson's walkman phone have been launched in the market these phones have large memories, loud speakers and media player soft wares which can support all the media related value added services that are available.

Content providers or VAS suppliers:

Some of the major content providers and application service providers are:

• MAUJ.com: Mauj Telecom is the #1 VAS Company in India.

• Hungama mobile: Hungama Mobile is South Asia's leading Mobile Entertainment Company

Drivers of VAS

The factors driving value added services can be classified into three things:

a. Environmental factors

b. Government or regulatory factors

c. Customer related factors

Environmental factors:

Booming economy

India has maintained its position as the second‐fastest growing major economy after China, as rising consumer and government spending taking place. Consumption and infrastructure spending are driving the growth. This booming economy has created job opportunities and increased the spending power of an average Indian. This has resulted in higher disposable incomes and faster acceptance of new technologies with a willingness to spend for them.

Market efforts driving VAS

For the operators, success of VAS has become important for their growth. This has led to a sharp focus on marketing & tie‐ups and a somewhat limited focus on development of content. Most operators are now trying to innovate in their VAS offerings and create sharper differentiation for their offerings.

3G technology:

As the number of subscriber keep increasing there is need to have increased spectrum capacity, thus the government is looking at converting from 2G technology to 3G technology that not only allows better spectrum but also better connectivity faster transfer rate and hence bigger opportunity for value added services.

Mobile operator forces:

APRU (average revenue per user) is at an all time low and this predominantly due to low cost pricing strategy adopted by the service providers to attract new consumers. As the initial cost of buying the handset is the entry barrier to most of the population mobile handset maker have also reduced their prices to all low rates.
Government factors:

The efforts taken by the government to help this sector are laudable. The formation of TRAI (telecommunication regulatory authority of India) has helped the government in forming policies that are friendly to both the service providers and the consumers. Some of the efforts taken by the Indian government are: Unified licensing regime – 2003: this regime basically allowed any operator to any service under any technology of his choice in the area of operation. Unified Access regime changed the operator's perspectives and they are started consolidating their services, there was an era of convergence and this led to the reduction of the prices at which these services were being offered.

Foreign Direct investment (FDI):

The government of India raised the FDI limit from 49 percent to as high as 74 percent. Followed by the FDI the government set up the Access deficit charge according to which all operating companies would have share a percent of their revenue for having used the governments infrastructure in places not accessible to them and this revenue would be used again to promote better infrastructure facilities in the rural area to support more subscribers and better connectivity.

UAS‐ Unified Access Service set up in 2005 allows cellular license that will give them the permission to operate across the geographies of India. UAS lead to market consolidation and emergence of few strong players that have PAN India operations and thus leading to cost efficiency and thus affordable pricing for the consumers.

Number portability:

An issue which is yet to be implemented is number portability, when implemented would give consumers the freedom to switch between various service providers without having to change their numbers.

Reduction in call rates & CPP initiation:

CPP (Calling Party Pays) was an important initiative which unshackled the mobility market and allowed many more subscribers to enter the mobility category. This initiative, in conjunction with the gradual reduction in call rates has ensured that the expenditure on voice for a typical user has gone down over the years. As a result more users have become comfortable in spending on VAS as it does not significantly impact their overall outlay on mobility.

Consumer related factors:

Demographics:

With a 1.1 billion population out of which 70 percent is between the age group 15 to 40, India is a very young country. And the disposable income of this country is growing day by day. More people are employed in call centers and business processing units. The long lived tendency to save among the Indians had today resulted in us having a large sum of money that we can spend on entertainment and media.

Increasing comfort levels with basic mobility services There is now a critical mass of users in the Indian mobile telephony market who are experienced mobility users. These users are very comfortable in using their phones and want to exercise the option of doing more on them beyond basic voice applications. The first phase of growth for VAS has come in from these converts; and these users will continue to drive the market and evolve into more advanced applications. At the same time the basic VAS applications will also continue to appeal to the new mobility category initiates.

Personalization of the digital world and digital devices With increasing pressures and stress on individuality, mobility users also want to carry forward their individuality to their mobile device. Thus for a large number of users the mobile phone has become a truly personal device and VAS has become an extension of persona. The enormous success of Caller Ring Back Tone (CRBT) is an excellent example which illustrates that users are ready to adapt to any service which offer them the option of personalization.

Focus on movies & music Movies & Music are the passion of India. Most of the rich content available to the end users revolves around these two, with Ringtones of popular Bollywood songs, Wallpapers of movie leads and games developed around movie themes. Given that Youth account for a large segment of users & also dominate the pre‐paid category, the focus on entertainment has been a strong hook to develop the VAS category and operators & content aggregators have been sharply focused in their efforts to pluck this low hanging fruit. It has been helpful that the film industry in India is very prolific and there are endless options to develop content around

SMS contests

Television is another culturally entrenched constant in the life of the average Indian. Typically TV viewing has been a passive affair, however following the global trend TV channels have been focused on making programming interactive. Thus programs, especially music & contest shows have started giving the option to their viewers to participate through SMS. A popular show like Kaun Banega Crorepati (KBC) generated 58 million SMS over a 3 month period. These shows have also been a key driver in increasing familiarity with basic SMS for traditional low user segments like non‐working women.

Apart from the above reasons value added services are also seen as the savior of the day for several other reasons:

Lucrative for operators: The average revenue from value added services is at least two times that of what is been received from voice. Also with the industry suffering huge churn rate, value added services are considered to be the saving grace.

Customers are ready: With mobile now achieving a significant level of density, customers at least in the metros, tier I and II cities are in a state to pay for them.

Host for hot services: It gives an opportunity to explore the localized content, Bollywood and other such services which can become really popular.

Mobile music boom: Music has achieved a significant popularity in the Indian industry especially Bollywood, this had lead to a huge craze for caller tunes and ringtone downloads.

Many parties make money: Components of VAS value chain, content providers, content aggregators and service providers are all tying up on a revenue sharing basis. There is a lot of scope for everyone to make money.

Rationale

The mobile market in India today , as seen in the Industry Background section, is witnessing steady growth in terms of numbers, but the average revenue per user has been declining , or at best constant, for mobile operators. With cut throat competition, they have no choice but to decrease call rates. Hence, the only way for them to increase Average Revenue Per User is by offering Value Added Services. There are some hurdles in the way - absence of utility services, lack of transparency in revenue sharing, an underdeveloped WAP/GPRS market, lack of infrastructure, and a preference for low-feature handsets.

Similarly, the mobile handset market in India has also seen double digit growths in the last few years due to both New Purchases and Upgrades as mentioned in the Industry Background section. Technological advancements have been replicated to high-end and mid-range phones in India, without any localization for the Indian market. A small aspect of localization is seen only in low-priced offerings.

Regionalization , in terms of regional language offerings both from the mobile operator and handset manufacturer, is a concrete growth solution for both entities. Localized offerings for the Indian market may ensure a new direction of growth for both the mobile operator and handset manufactuer, considering the diversity and sheer numbers in the Indian market. Simply put, regionalisation would mean operators reach people in diverse geographies - and serve them services using their local language and cultural flavour.

This study will hence try to fill the void between regional language enabled handsets and services by identifying present hurdles and future opportunities for the same. . Based on the findings, possible suggestions will be made to Mobile Handset manufacturers as well as Wireless Service providers for possible offerings in RL products and services.

Expected Contribution

This research is unique as it tries to study the point of disconnect between mobile operators and handset manufacturers towards offering regional language services and offerings, from the consumers' viewpoint. It hopes to isolate reasons as to why the current consumers don't use the existing regional language features , and given the possibility of such offerings, how would they like to use it. With this, I hope to open up opportunities for both the handset manufacturer and mobile operators.

With the findings of this research, I hope that the following questions may be answered –

o What are the possible avenues for growth in the VAS segment?

o Is localization in handsets desired beyond the current offerings and functionality?

o With the advent of localized offerings, would users be looking for localization only in terms of language or content too?

Research Objectives

* To find out which features in an RL-enabled handset are currently used, and how frequently

As already mentioned earlier, there are handsets available in the market currently which support regional language text. This objective aims to find out how do the users with such handsets use regional language text on their phone, given the limited options currently available to them in terms of services.

* To find out if they use Regional Language text to communicate in other media [ internet, email etc]

This is keeping in mind the fact that most of the regional language text supporting phones are the low-end phones in term of prices and features. To capture the tendency of users with high-end phones to communicate in regional language, other communication media needed to be explored. The postulation behind this objective is that a person with a high-end phone will most probably be an Internet user too. Hence, this objective aims to find out how people without regional language text enabled phones use their regional language to communicate. The most popular forms of electronic written communication today [ after the SMS] exist on the Internet. Also, Internet is a fairly evolved medium as compared to mobile phone communication, introducing features like Transliteration for various Indian Regional Languages on popular e-mail and social networking sites.

* Explore the susceptibility of the users towards using Regional Language text messaging on mobile phone as a preferable mode of communication

This objective is a logical consequence of the above two objectives. By exploring the users' likelihood to using regional language , I hope to explore opportunities for Handset Manufacturers to introduce more offerings in the market in terms of both hardware and software.

* Explore the possible desirable services that the users might want from their service provider to be delivered on a regional language text platform

India is a highly evolved mobile market, with telecom operators providing a variety of Value Added Services to the user beyond just Voice services. This objective aims to explore all the possible avenues available to the telecom operator in terms of regional language Value Added Services [VAS]. For the sake of questions related to this particular objective, users have been asked to imagine that they currently possess a handset which can perform functions in regional language.

Research Methodology

Research Design

Secondary Research

A base of understanding regarding the subject needs to be created before the primary research is undertaken so that it is fruitful. An industry background scan was done to isolate the major reasons for success of various Value Added Services, top Value Added Services in India and the internal structure of the Value Added Service Providers within the telecom industry. It also helped in understanding the various hurdles towards growth in the telecom industry and the role of localization in overcoming this growth. Next, a literature review was undertaken to understand the consumer behaviour towards mobile services usage, languages used during mobile communication and possibilities of newer interfaces in the handset. This stage helped me have a clear understanding of consumer behaviour in the service sector and therefore understand the dynamics of the volatile Indian mobile market. This helped me formulate the structure for primary research questions.

Primary Research – Qualitative

Data Collection Tool: Interviews

Since the research objectives are mostly exploratory in nature, a qualitative research phase is necessary to understand the current scenario in the mobile industry. The purpose of the qualitative phase is to reveal aspects of mobile phone usage which aren't covered in industry data reports. These aspects also provide a stepping stone for the designing of the questionnaire in the next stage.

Primary Research – Quantitative

Data Collection Tool : Questionnaires

This phase will help me isolate the current usage patterns and test the acceptability of new offerings in regional languages. Owing to the wide range of mobile phone users in India [ in terms of geographies and SECs], the questionnaires were administered in both Online and Offline modes. Offline surveys were carried out through acquaintances and mall intercepts.

Sampling Plan

Universe : The Universe for this research will be all mobile phone users in India.

Qualitative Phase

Mobile phone users, depending on the offerings of mobile phones in the market currently, are divided into two sets for the purpose of this research.

Set 1

o Currently, mobile phone handset manufacturers have introduced RL keypads only in the lower range of their offerings i.e. typically for handsets costing between Rs.500 to Rs. 3000. Hence it can be safely assumed that these handsets are targeted at SEC B and lower SECs. From these users, I aim to find out if and how they use the regional language functions on their phones, for what purpose and occasions.

o SEC B and SEC C

Set 2

· Users who currently own mid to higher end range of handsets [in terms of price and features] which typically don't have regional language keypads

o In this part of the study, an attempt will be made to explore the communication habits of individuals in the higher SECs. By communication habits, we mean text based communication, mainly SMS, and other forms like e-mail, IM, social networking sites etc

o SEC A

An attempt has been made to cover all genders and most age groups. Due to the time constraints involved, the following rotation matrix has been applied to arrive at an optimum number of respondents.

User Set

Age: 15-25; Male

Age: 25+ ; Female

Age: 15-25; Female

Age: 25+ ; male

Set 2

1

1

1

1

Set 1

1[SEC B]

1 [SEC C]

1 [B]

1 [C]

User Set 1 : 4 users from SEC A

User set 2 : 4 users from SEC B and C

Primary Research – Quantitative Phase

The questionnaire was administered to 106 people in both offline and online modes. The respondents varied from from 15 to 52 years, across genders and SECs. The respondents were based out Ahmedabad, Bangalore, Mumbai, Pune, Kolhapur and Bopal.

Findings and Analysis

Key findings from the Qualitative Phase

The qualitative phase consisted of 8 interviews, 4 each from User Set 1 and 2 as explained in the Sample Design. Some of the key findings emerging from the interviews are mentioned below. These findings are used to build the questionnaire for the next stage of research.

User Set 1 –

* These users here have regional text input in their handset

* Some of them regional language text to store names in their phonebook.

* The voice functions were largely preferred across all age groups over text functions of the phone.

* IVRS features provided by the service provider [ Vodafone , Airtel etc. ] were also used in either Hindi or Local language [ e.g. downloading ringtones, callertunes etc]

* Only one of the respondents had accessed internet on his own, and had explored Orkut . He had not explored any transliteration tools on the internet.

* One respondent had accessed Railway Enquiry through his mobile phone in Hindi occasionally.

* For all respondents here too the biggest obstacle in using the regional language text functions was the hardware availability and ease of use.

* All respondents were keen on having services delivered in local language text, especially subscription services like News, Astrology etc.

* One of the respondents, a trader, also mentioned that he would find it helpful if the rates from local markets were updated daily through his mobile phone.

* The older respondents were more frank in admitting that they found it difficult to communicate through English Text

* All respondents said that the biggest reasons for not using regional language through mobile phones were – the lack of hardware availability and lack of services offered in regional language.

User Set 2 –

* Most of the handsets don't have regional language input, although the phone is able to display regional language text.

* The older respondents frequently SMS and forward texts in their mother tongue. These are written in both the regional as well as English script

* The older respondents also prefer voice platform for various services like ringtones, callertunes etc

* The younger respondents seemed more comfortable with the non-voice functions of the phone

* They used the phone for voice and non-voice functions equally

* Most of the SMSing and text functions take place in English only. Occasionally, messages are written in Hindi / local language in the English script

* Among the younger respondents who accessed the Internet regularly, it was seen that almost all their communication took place in English. With the advent of transliteration tools on the internet, occasional messages are sent out in regional language [ less than twice or thrice a month]

* For both age groups and genders, the biggest hindrance to using Regional Language while communicating was the hardware availability for the same.

o Most users have phones with regional language inputs

It was seen that most of the respondents surveyed had phones with regional language input capabilities. Even if some phones didn't have the regional language text input options, they were able to display regional language text properly. Most of the languages supported were either Marathi, Hindi , Gujarati or Arabic. This can be attributed to the fact that most of the respondents were from Ahmedabad and Maharashtra. A few of the respondents with high-end mobile phones had Arabic language support too as they were purchased abroad.

o More than half the respondents have tried using the regional language functions on the phone , and more than half of these respondents find it moderate to difficult to operate their phones in the regional language.

According to the survey results, more than half of those respondents who possess regional language text input options have tried out the regional language features on their phone. Out of those respondents who have tried using it, most of the respondents have said that the level of ease in regional language functions is moderate to difficult.

Among the given options, the most popular solution to improving the user friendliness of regional language input in phones emerged to be software related solutions. ‘A better phone software' and ‘ A better dictionary than the existing ones' emerged as key solutions to ease regional language input over ‘A better layout of keys'. This indicates that given the vast alphabet of regional languages in India, users prefer to have more predictive software and dictionaries to make communication in regional language easier. Also, one of the other options suggested by the respondents was to make available ‘Frequently Used Messages' in regional languages by the handset manufacturer. These can be similar to the existing ‘Templates' on handsets.

Note : “A Better Software” was described as Software which would transliterate. For example, would display ‘Kya' as “क्या”

Communication Related Findings

o English is used mainly to perform functions like internet surfing, using applications, storing contacts, sending and receiving SMS

English still remains the preferred option for performing most of the text based functions on the mobile phone. It is also seen that more respondents receive SMS in regional languages than they send , indicating their willingness yet inability to send SMS in regional languages. Most of the received SMS were reported to be forwards from Family and Friends.

o Current Regional Language Communication in other electronic media

Considering the fact that lot of Internet Services have realized the potential for regional language communication in India and introduced services to cater to these demand, respondents were asked if they used any of the other media in regional languages. This would indicate their willingness to communicate with their Friends and Family, provided such an option was available. It was found that among the various options currently offering communication in regional language viz. SMS, e-mail, chatting and posting on social networks and forums; most of the regional language communication happens on Internet Chats and SMS forwards.

Value Added Service –related findings

This section details out the findings about the possibilities of VAS offerings in regional languages. The respondents were asked to imagine that they possessed an easy-to-use phone with regional language text inputs, and that a leading mobile service provider was launching Regional Language VAS offerings. They were then asked to select and suggest which all services would they like to be offered in their regional language. The top desired services in regional language are

The last two services can be seen as a new dimension in localization of mobile offerings. It shows that with increasing number of regional players in the telecom industry , one of the opportunities for them to gain a strong foothold in any particular region is to provide regional offerings depending on the culture of that region.

Inferences

o There does exist a need to communicate in regional languages even in new media.

India has seen an early adoption rate for mobile across all SECs and age groups, while the younger age groups from SEC A,B and C have shown a high adoption rate towards internet services as well. With growing written communication happening in both these media, it is interesting to note the presence of regional language among all kinds of users. Due to the ease of use on the internet as compared to the mobile phones, regional language usage is seen more on the internet than mobile phones currently. This shows that there is a need to communicate in regional languages, with major hindrance being the availability of supporting hardware.

o There is a demand for regionalization of offerings not in just terms of language but content too

VAS offering are normally classified under 3 categories – Do, Know and Enjoy. Do refers to the services we use normally such as phonebook and SMS. Know refers to informational services such as News, location-specific information such as movies, restaurants, taxi services, etc. Enjoy refers to the entertainment options available. Through the findings of this research, it was seen that although all 3 categories have a demand to be offered in regional languages, the Know and Enjoy categories also have a demand for regionalization of content. Know and Enjoy would form the core part of regionalisation of VAS, wherein the content is specifically tailored to location-specific information and local taste.

o SMS continues to dominate the VAS Segment, followed by Subscription Services. This is replicated in the demand for Regional Language VAS.

As was seen through the secondary research of industry reports, SMS and Subscription services formed a major chunk of the VAS revenue pie. This was reflected in the primary research done here too where most respondents used SMS and Subscription services. Since these two services were the most widely used, there was a demand for these services to be offered in regional languages too. It must be noted that while asking the VAS-related set of questions, respondents were asked to imagine that they possessed a user-friendly mobile handset with regional text inputs.

Recommendations

Opportunities for handset manufacturers

It is seen that currently although not all phones have the regional text keypads, all of them have the capability to display regional language text. As seen in the above sections, there is a latent demand for regional language text input. Despite the feature being included in a few handsets now, users have not entirely adopted to regional language communication. The main reason for this has been found out as high levels of difficulty in using the regional language functions. Hence, a few recommendations and opportunities for handset manufacturers –

o Introduction of Transliteration software in phones targeted at urban SEC A and B consumers

The alphabet of any Indian regional language is much more vast than the English alphabet with different sets of vowels and consonants. Hence, all the letters cannot be displayed on the keypads, unlike English letters. Even currently, the regional language text on mobile phones is displayed as a range and not entire set. With the growing prominence of English education, very few users tend to remember the sequence of the alphabet in other languages. Hence, taking a cue from the internet services, handset manufacturers should introduce a transliteration software in their mobile phones for regional language. This would ensure that users currently comfortable with the English alphabet are able to phonetically enter words in regional languages. For example, with a transliteration software, by typing ‘K-Y-A' on the keypad, one can see ‘क्या' on their screens.

o Introduction of better dictionaries for predictive inputs

Currently, most of the dictionaries follow a set pattern of prediction, dominated by the English input for those keys. The sequence of prediction is the same as set for the English dictionary; hence for regional languages the output is usually a meaningless string of alphabets. Newer dictionaries should be developed separately for Indian languages and included in the handsets.

o Introduction of Templates in Regional Languages

All the phones today contain a set of 4-10 messages which are frequently used. Examples of such messages are “How are you” , “I am busy” etc. As a stepping stone for consumers towards easier use of regional languages, handset manufacturers can include such templates in regional languages also.

o Touch-screen phones

Touch-screen phones are phones without a physical keypad. These phones display keys on their screen enabled by a software. Among all the existing phones in the market, touch screen phones are the most easily adaptable to regional language text input. The manufacturer can include a software which displays regional language keys instead of the English alphabet. Also, due to the flexibility of screen space available, the entire alphabet can be displayed as opposed to physical keypad phones.

Opportunities for Mobile Service Operators

The opportunities for mobile service operators are endless with respect to the Value Added Services they can offer in regional languages. Considering the current scenario, these opportunities have been divided into 2 categories – Opportunities with the existing range of handsets and Opportunities with handsets better suited for regional language text input.
Opportunities with the existing range of handsets

These services are the 2ng highest used VAS after SMS, hence it is a logical conclusion that these services also are demanded in regional languages. The reason why this suggestion can be made possible right now is that almost all the handsets today are capable of displaying regional language text. Subscription services are usually activated by sending one keyword or one call , and are activated for usually a month. Hence it isn't imperative that the user send the keyword in regional language. This is one of the most easily implantable services right now as the content is already in place, only translation to regional languages needs to take place.

o Local Offerings – Local News, Movie timings etc

Along with regional languages, there exists a potential for local content in regional languages too. A local, city-wise content can be made possible for all the metros and most of the capital cities in the nation. Even in other informational media, it is seen that Local Informational Searches are the new direction for growth. Local searches delivered in the local language can have the potential for wider reach than existing services.

Similar to the above offering, regional services can be offered in a wider net like an entire state or an entire region with similar language and culture. This offering takes a deviation from the normal entertainment options available on VAS today i.e. Bollywood and Regional Films. By venturing into culture specific content, mobile service providers can reach out to audiences where usually TV and Mobile are the only electronic entertainment devices in the household.
Opportunities with handsets better suited for regional language text input.

o Sending and Receiving SMS and e-mails

It is seen that there exists a need for communicating in regional languages among all age groups. The current hardware doesn't make this too easy for users. Hence, in the event that such hardware is made available to users, the mobile service operators must be prepared to handle volumes of regional language text. The opportunity here lies in providing more evolved SMS clients [ Like Airtel's SMS 2.0] which are better suited for regional languages with appropriate cultural cues included too.

Limitations of this research and Way Forward

o Due to constraints of sampling, this research was not able to dedicate a section to the opportunities solely available for the rural users.

o Due to the vast variety and technological advancemets in the mobile market today, this survey was not able to capture all the latest handset technologies e.g. QWERTY keyboard phones like Blackberry, Nokia Communicator phones etc. A humble attempt has been made to address opportunities with touch-screen phones.

o The research was restricted to the GSM segment therefore fails to capture the perspective of the entire telecom market which comprises of a rather large CDMA segment

o In-depth study of opportunities available for each region can also be made in further studies.

o The duration of research is not sufficient, with more time larger and diverse segments could have been covered.

o A future study on the different categories of VAS and a detailed study about the factors that drive there usage may be done.

o A demographic and psychographic study to identify the perceptions of the different segments of the market about VAS.

Please select which language do you currently access the following services in

Service

English

Other Languages

Don't access this service

Sending SMS [to Friends and Services]

Receiving SMS [ from Friends and Services ]

Accessing Internet portals

Using other applications like Travel, Banking etc

A mobile services operator is planning to launch Value Added Services in regional languages across India. Imagine you have a regional-language compatible handset. Which of the following services would you be likely to use in your local language?

Please select all the statements applicable to the way in which you keep in touch with your friends and family.

Statement

Never

1-2 times a month

3-8 times a month

8-20 times a month

More than 20 times a month

I send SMS in my mother tongue to my friends and family

I exchange SMS forwards in my mother tongue with Friends and Family

I e-mail my friends and family in my mother tongue

I chat with my family and friends in my mother tongue/regional language

I post on discussion forums and social networking sites like facebook in my mother tongue/regional language

Section 2

Please fill in your name.

Please select your age group and gender.

Please select your present occupation.

Please select your highest education level.

Please enter your city of current residence.

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